Singapore 20/05/2016 - The global copper, lead and zinc market remained in oversupply in the first quarter, but the surplus have shrank, according to latest data released by the World Bureau of Metal Statistics (WBMS).
The copper market recorded a surplus of 77,000 tonnes in January-March, down from a surplus of 120,000 tonnes in the January-February, having registered a surplus of 463,000 tonnes in 2015.
“The supply-and-demand balance may be moving slowing in the right direction, which could support prices in the medium term,” commented Boris Mikanikrezai, metals analyst at FastMarkets.
The copper market is expected in a “raw balance” in 2016, with supply made tighter after the State Reserve bureau’s purchase of 150,000 tonnes of copper cathode in the first half of this year and following the bottoming of Chinese copper demand, Macquarie Commodities Research said in a report on Wednesday.
The WBMS data shows world copper mine production at 4.85 million tonnes in January-March, up 5.2 percent on the same period in 2015 - the growth, however, slows from the 7.9-percent rise in January-February.
Global refined copper production has also slowed in the first quarter. Output rose 3.2 percent year-on-year to 5.76 million tonnes during the period, compared to an 8.3-percent groowth in January-February. In the first quarter, significant increases in demand came from China - up 79,000 tonnes - and in Chile, an increase of 32,000 tonnes.
January-March global copper consumption of 5.683 million tonnes was up from 5.313 million tonnes for the same months of 2015.
Chinese apparent copper consumption in the first quarter rose 293,000 tonnes year-on-year to 2.76 million tonnes, which represented 49 percent of global demand.
Macquarie sees the copper price remaining in the high $4,000s per tonne in the second quarter and struggling to move much higher than low $5,000s in the second half of the year on weak sentiment.
The London Metal Exchange three-month copper price was last at $4,602.50 on Friday, up $22.50 from Thursday’s close.
Meanwhile, the zinc market was in surplus of 90,000 tonnes the first three months of the year, narrowing from a 110,000-tonne surplus in January-February. The zinc market surplus was at 118,000 tonnes in 2015.
Global refined zinc production fell 6.4 percent, and consumption slipped 3.9 percent year-on-year in January-March. Chinese refined zinc output slipped six percent while demand rose 0.2 percent year-on-year during the same period.
For lead, the market was in surplus of 8,500 tonnes in January-March, compared to a 13,000-tonne surplus in January-February. The market recorded a deficit of 6,500 tonnes for the entire 2015.
World refined lead output rose 0.6 percent year-on-year to 2.516 million tonnes, and global demand increased 12,000 tonnes in the first quarter.
Apparent lead consumption in China fell 38,000 tonnes to 910,000 tonnes in January-March, representing 36 percent of global demand.